Beach Energy Limited · ASX:BPT

Beach Energy — Beach Petroleum — Lodge Institutional Stockbroking Conference 2009

45 slides from Beach Energy's conference presentation, Apr 2, 2009

  1. Slide 1: Lodge Institutional Stockbroking Conference

    + For personal use only LODGE INSTITUTIONAL STOCKBROKING CONFERENCE Balgownie Estate, 1 April 2009 Reg Nelson Managing Director Beach Petroleum Limited

  2. Slide 2: Disclaimer & Important Notice

    + This presentation contains forward looking statements that are subject to risk factors associated with oil, gas, geothermal and related businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in un

  3. Slide 3: From onshore …

    For personal use only + From onshore …

  4. Slide 4: … to Offshore

    For personal use only + … to Offshore

  5. Slide 5: Extensive Asset / Infrastructure Holdings

    + Extensive Asset /Infrastructure Holdings For personal use only Gas Coal Seam Processing Gas LPG Pipelines & Gas Liquids Export Facilities Natural Gas Geothermal Power Beach … A Diversified Energy Provider Greenhouse Crude Oil gas Sequestration

  6. Slide 6: Quality Production and Infrastructure Assets

    + • Record production of both oil & gas • Currently 27000 boepd (35% oil & 65% gas) net to BPT 1. Cooper oil & gas • Very large contingent gas resource of ~262 mmboe • Substantial infrastructure facilities For personal use only •Carbon storage potential • Oil production of ~3000 bopd net to BPT 2. G

  7. Slide 7: Consistent Growth

    For personal use only + Consistent Growth

  8. Slide 8: Product Split – oil and gas revenue

    + Oil made up 62% of oil and gas revenue For personal use only Gas / gas-liquids a natural hedge against the oil price Product Split – oil and gas revenue

  9. Slide 9: Key Financial Achievements FY2009 H1

    +  Record sales revenue up 41% to $480 For personal use only million FY2009 H1  NPAT up 117% to $127.5 million  Normalised net profit up 142% to $52 million Key Financial  Operating cash flow up 31% to $68 Achievements million 400  “Net Debt” gearing of 4.6% 300  Debt/Debt +Equity down 21% to

  10. Slide 10: Tapis oil price versus WTI

    For personal use only + Tapis is the relevant Australian crude oil price marker For most of 2009, Tapis has been trading at significant premiums (of up to USD12/bbl) relative to WTI

  11. Slide 11: Hedging as insurance

    +  Beach‟s hedging is predominantly equivalent to an insured position  Achieved by purchasing „floor prices‟ For personal use only that guarantee a minimum designated price for a portion of oil production (but allow the Company to receive higher Hedging as prices if the spot price of oil is higher

  12. Slide 12: Operations – Key Achievements H1 FY09

    + Operations – Key Achievements H1 FY09 For personal use only  Record Production - 5.0 MMboe  Continued exploration success in Cooper Basin  Tipton West CSG reserve upgrade  Cooper Basin Contingent Resource quantified  Egyptian fields approved for development in 2009

  13. Slide 13: Reserves Growth

    + Reserves Growth For personal use only 150 MMboe Surat Gas 100 Reserves Cooper Gas 50 Oil  Reserves (at 31 December )  20 MMbbl of Oil 0 FY 06 FY 08 FY 09 FY 07 H1  684 PJ of Gas  7 MMboe of Gas Liquids  Total 144 MMboe Reserves by Asset  Contingent Resources (MMboe)  Cooper Basin 262 MMboe

  14. Slide 14: H1 FY09 Production

    +  FY08 Production  H1 FY09 Production 2.8 million barrels of oil (MMbbl) For personal use only 7%  30 Peta-Joules 23% of Gas (PJ)  9.3 million barrels 9% of oil Cooper Oil Production Gippsland Oil 61% equivalent (MMboe ) Cooper Gas Surat Gas H1 FY09 Production  1.6 MMbbl of oil (up 29%)  17.2

  15. Slide 15: Drilling H1 FY09

    + Drilling H1 FY09 For personal use only  C ooper Basin – 44 wells Drilling Activity  2 Expn wells – 100% 150  2 Callawonga Wells No. of Wells  23 ‘COP’ wells 100 Gas  17 Gas Devl’t Wells 50 Oil  Tipton – 33 CSG wells 0  Bass/Otway – 2 wells  Egypt – 1 Well

  16. Slide 16: The Cooper Basin

    + For personal use only The Cooper Basin An important asset with new long term life

  17. Slide 17: Beach's Cooper Basin

    + For personal use only Beach‟s Cooper Basin Reserves 220 PJ & 15 MMbbl  1H FY09 Production 7 PJ & 1.2 MMbbl  Feb 09 production of 27,383 boepd:  Oil ~8,000 bopd  Gas ~87 TJ / day  Brownlow & Canunda gas discoveries  Callawonga & Perlubie oil successes

  18. Slide 18: Cooper Basin Substantial Reserve & Resource Base

    + Cooper Basin Substantial Reserve & Resource Base For personal use only Reserves & Resources Million boe – net to Beach 15 55 Oil Reserves 179 Conventional Gas Reserves 83 Conventional Gas Resources Unconventional Gas Resources

  19. Slide 19: Cooper Basin – Growing Oil Reserves & Production

    + Cooper Basin – Growing Oil Reserves & Production Million Boe use only Reserves Annual Production 70 10.0 9.0 60 12 8.0 For personal 15 2.0 16 1.6 2.5 50 7.0 6.0 40 5.0 Oil 30 51 48 4.0 6.5 6.5 Gas 44 6.2 20 3.0 2.0 10 1.0 0 0.0 FY 07 FY 08 FY 09 (Forecast) FY 07 FY 08 FY 09 (Forecast)

  20. Slide 20: The Eastern Flank (Bodalla Block) – early value adding

    + The Eastern Flank (Bodalla Block) - a case study of early value adding For personal use only Bodalla Block • Acquired 78% equity in June 2002 • Purchase Price $17.7 million • 2.1 MMbbl @ $8.43 / bbl • Added 1.6 MMbbl Reserves through 3D seismic & drilling Bodalla Block • Purchase actually 3.7 MMbb

  21. Slide 21: The Western Flank: New Oil Fairway

    + The Western Flank: New Oil Fairway For personal use only

  22. Slide 22: High Profit Oil – PEL92

    + High Profit Oil – PEL92 For personal use only High Profit Oil Callawonga-Parsons Area • >8 mmb discovered to date • 50% Exploration Success Rate • F&D Cost ~$10/bbl • Production Costs ~$25/bbl • Robust Prospect Inventory • Up to 7 wells to be drilled mid 2009

  23. Slide 23: The Future for Cooper Gas

    +  Three main sources in addition to further conventional gas in areas adjacent to Moomba:  Shale gas  Tight gas For personal use only  Deep coal gas  An indication of the future:  Shale gas in North America has followed the earlier lead of coal seam gas  Unconventional gas now a significant

  24. Slide 24: Gas: meeting power demands in a carbon-constrained world

    + Gas: meeting power demands in a carbon- constrained world For personal use only  ‘ … gas-fired power generation can reliably and affordably deliver right now, today, 80 per cent of the carbon emissions that would be achieved by retro-fitting an existing coal-fired plant with carbon capture and st

  25. Slide 25: Gas: meeting power demands in a water-constrained world

    + Gas: meeting power demands in a water- constrained world For personal use only  ‘ … Gas-fired power generation uses very little water – as little as half to 1/200th of the water used per Mwh of that used by existing coal-fired power stations …’ (Belinda Robinson, APPEA, Address to National Press

  26. Slide 26: Surat Basin Tipton West – Coal Seam Gas

    + For personal use only Surat Basin Tipton West – Coal Seam Gas  2P Reserves 467 PJ  3P Reserves 1,115 PJ  A very material asset for Beach  Beach’s cost of entry $35 million  Sale process well advanced

  27. Slide 27: Gippsland Oil – BMG Project

    + Gippsland Oil – BMG Project For personal use only  At 31 December 2008:  Beach 30%  Producing ~10,000 bbls/day  Remaining Oil Reserve ~18 MMbbl (5 MMbbl net)  Gas Resource - 249 PJ  Beach has recovered all its costs on BMG + $70 million  Further development planned for 2009 +

  28. Slide 28: Egypt

    Egypt For personal use only  North Shadwan Concession  Beach 20%  Operator – BP  “Nearshore” Fields (377 & 385) to be developed during 2009  Net Reserves ~ 2mmb +  First Oil late 2009  Expn well in 3rd quarter  Burtocal discovery being appraised  Burtocal-2 resulted in oil column intersecti

  29. Slide 29: Exploration Balanced Portfolio

    + Exploration For personal use only Balanced Portfolio Lower Risk Cooper Basin Program High Impact Program  Offshore Australia / NZ  Egypt – Gulf of Suez  Tanzania, Spain, Albania  Rigorous Evaluation  Strong Joint Venture Partners  Effective Management  Significant Upside  Aiming for 60:

  30. Slide 30: Geothermal Exploration

    + Geothermal Exploration For personal use only  Paralana Geothermal Project  Initial cost up to $10 million to drill 1-2 wells to demonstrate hot rock energy resource – Paralana-2 well to spud mid 2009  If successful, next phase is to install 7.5 Mw plant to supply power to Beverley Uranium Mine

  31. Slide 31: Drilling Outlook - 2009

    + For personal use only Drilling Outlook - 2009  66 Wells  60 in Cooper Basin (40:60 oil/gas)  6 Offshore / International  Key Exploration Wells  South July-1 (Gulf of Suez) March  Burtocal North-1 (Gulf of Suez) 3rd Qtr 2009  Teen-1 (Gulf of Suez) 3rd Qtr 2009  Spikey Beach-1 (Bass Basin) 4

  32. Slide 32: A personal view of oil prices

    + For personal use only A personal view of oil prices

  33. Slide 33: The State of Play

    + The State of Play For personal use only  Long term oil demand still expected to grow (IEA and EIA forecasts)  Presently ~85 mmb/d for 2009 …  But … moving up to 115 to 125 mmb/d over next 20 to 25 years (approx. 1.5% p.a. growth) OPEC Spare Capacity mmb/d  Limited and diminishing spare supply

  34. Slide 34: Spare capacity is the key

    Spare capacity is the key For personal use only  Merrill Lynch estimates global production from existing fields is declining at ~4.5% per annum  This is likely to become greater (ten years ago the global average was ~ 1% p.a.)  However, demand is not likely to fall by the same amount  Fall in de

  35. Slide 35: Stifled investment = future shock

    For personal use only + Stifled investment = future shock OPEC nations have collectively postponed 35 oil drilling projects that had been in various stages of development, OPEC Secretary General Abdalla Salem el-Badri said. The delayed projects, shelved for an indefinite period, are a sign that memb

  36. Slide 36: China's position

    +  Global oil inventories are set to decline rapidly  China is using large currency reserves plus For personal use only financial weakness elsewhere to lock up long term commodity supply  China … forecast growth for 2009 of 6.5% (World Bank) but signs of stabilising economy China‟s position

  37. Slide 37: A scenario: Now … and the next few years

    A scenario: Now … and the next few years For personal use only  Fall in demand eventually slows (when? … perhaps late 2009)  Supply side contraction bites severely, particularly for non OPEC supply, which suffers a sharp and perhaps a dramatic fall over the next few years through lack of investmen

  38. Slide 38: For personal use only

    For personal use only +

  39. Slide 39: Reference Slides

    For personal use only + Reference Slides

  40. Slide 40: Comparison of 'Normalised' Profit

    + Comparison of „Normalised‟ Profit For personal use only Net profit after tax (NPAT) H1 FY09 H1 FY08 A$M A$M NPAT 127.5 58.8 SIGNIFICANT ITEMS Remove unrealised commodity hedge loss / (gain) (76.4) 16.8 Remove commodity hedge close out 16.9 - Remove asset sales - (64.2) Remove exploration and asset

  41. Slide 41: Key Drivers behind increase in Normalised Net Profit after tax

    + Key Drivers behind increase in Normalised Net Profit after tax For personal use only 100 $33.6 80 $12.3 A$ million $34.1 $52.0 60 $24.9 40 $21.5 20 0

  42. Slide 42: Sales Increase

    + Sales Increase For personal use only 350 300 $5.3 $333.9 250 A$ million $249.2 $63.1 $22.6 $4.3 200 150 100 50 0

  43. Slide 43: Summary of Hedging Gain

    + Summary of Hedging Gain For personal use only Hedging position for 6 months ended 31 December 2008 (A$'000) Realised Unrealised Total Interest rate swap 1,303 (26,916) (25,613) Currency (1,650) (3,657) (5,307) Oil (625) 106,994 106,369 Oil (positions closed out early) (16,870) - (16,870) Total (17

  44. Slide 44: Egypt – North Shadwan Concession

    Egypt For personal use only North Shadwan Concession  Beach 20%  Operator – BP  “Nearshore” Fields (377 & 385) to be developed during 2009  Net Reserves ~ 2mmb +  First Oil late 2009  Expn well in 3rd quarter  Burtocal discovery being appraised  Burtocal-2 results resulted in oil column inte

  45. Slide 45: Egypt – Southeast July Concession

    Egypt For personal use only  Southeast July Concession  South July -1 drilling +

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